St. Simons Waterfront, LLC v. Hunter, Maclean, Exley & Dunn, P.C.
293 Ga. 419
| Ga. | 2013Background
- SSW hired Hunter Maclean for a condominium development; purchasers sought rescission and blamed SSW and its counsel.
- Hunter Maclean attorneys informed the firm's in-house counsel (Arnold Young) that SSW might sue the firm; Young, who had not handled SSW matters, interviewed firm lawyers and consulted outside counsel.
- SSW retained new counsel for rescissions but asked Hunter Maclean to continue closings for a period.
- SSW later sued Hunter Maclean for malpractice, breach of fiduciary duty, and fraud; discovery sought intra-firm communications and documents involving in-house counsel.
- Trial court ordered production, reasoning that a conflict of interest (per Georgia Rules of Professional Conduct) abrogated privilege for in-house counsel communications; Court of Appeals vacated and remanded; Georgia Supreme Court granted certiorari.
- Supreme Court held that attorney-client privilege and work-product doctrine in the law-firm in-house counsel context are governed by ordinary privilege/work-product rules (not by the Rules of Professional Conduct), and remanded for fact-specific application.
Issues
| Issue | Plaintiff's Argument (SSW) | Defendant's Argument (Hunter Maclean) | Held |
|---|---|---|---|
| Whether intra-firm communications with a firm’s in-house counsel about anticipated malpractice claims are privileged | Privilege should be abrogated because a conflict arose when firm lawyers’ interests became adverse to SSW; Rules of Professional Conduct (conflict/imputation) negate privilege | Privilege and work-product attach to in-house counsel communications where an attorney-client relationship between firm and in-house counsel exists and other privilege elements are met | The ordinary attorney-client privilege test applies; Rules of Professional Conduct do not govern privilege determinations; privilege may attach if the usual elements are satisfied |
| What factual showing is required to establish the firm-as-client for in-house counsel communications | N/A (SSW seeks disclosure) | Firm must show an attorney-client relationship between in-house counsel and the firm (e.g., billing, separate files, formal role) | Existence of firm-as-client is a fact-specific inquiry; proponent of privilege (firm) bears burden to prove elements |
| Whether ethical conflict/imputed conflicts automatically waive privilege | Privilege should be waived because imputed conflicts make firm representation inconsistent with client loyalty | Ethical violations or conflicts are collateral and do not automatically extinguish evidentiary privileges | Ethical rules and imputed conflicts are not dispositive for privilege; ethics rules do not augment or reduce privilege law |
| Applicability of work-product protection to materials prepared by in-house counsel defending the firm | N/A (SSW seeks material) | Work product protection applies to in-house counsel materials prepared in anticipation of litigation once firm becomes adverse to client | Work-product doctrine applies under standard standards once in-house counsel is representing the firm against the client; core mental impressions remain absolutely protected |
Key Cases Cited
- Upjohn Co. v. United States, 449 U.S. 383 (recognizing privilege for communications with in-house corporate counsel and explaining purpose/limits of privilege)
- Southern Guaranty Ins. Co. v. Ash, 192 Ga. App. 24 (recognizing privilege for in-house corporate counsel communications under Georgia law)
- Marriott Corp. v. American Academy of Psychotherapists, 157 Ga. App. 497 (discussing privilege for communications to in-house counsel and limits)
- Tenet Healthcare Corp. v. Louisiana Forum Corp., 273 Ga. 206 (noting narrow construction of privilege because it impedes truth-finding)
- Swift, Currie, McGhee & Hiers v. Henry, 276 Ga. 571 (holding client generally owns client file; work-product doctrine does not apply when client seeks its own attorney-created materials)
- WellStar Health System v. Jordan, 293 Ga. 12 (statutory standard for compelling work-product materials: substantial need and undue hardship)
- McKinnon v. Smock, 264 Ga. 375 (absolute protection for attorney mental impressions; in camera review may be required)
- United States v. Jicarilla Apache Nation, 131 S. Ct. 2313 (discussing fiduciary exception origins and rationale)
- Garvy v. Seyfarth Shaw LLP, 966 N.E.2d 523 (extending privilege and work-product protections to in-house counsel materials in malpractice-defense context)